The pace of innovation is relentless and constant. Expectations of digital products and services continue to evolve, and the worlds of ‘business to consumer’ and ‘business to business’ are increasingly converging. The two are no longer mutually exclusive. Users expect simple, intuitive, personalised online experience, regardless of whether the channel is commercial or consumer (personal).
This evolution in B2B expectations brings with it a new technological challenge. One which is constantly moving. How do B2B retail groups maintain pace with innovation in the B2C world? The simple answer is; they can’t. And neither should they. Their proposition is to understand their B2B and B2C retail needs, and to deliver against those. Does that mean they are exempt from change? Absolutely not. Market disruption is becoming the norm. Standing still simply isn’t an option. Like a shark, you stop swimming, you drown.
So if getting in front of the curve isn’t realistic, what is? Organisations need to be equipped to react. They need to understand the triggers and have the agility to change. Sounds simple. There are two not insubstantial hurdles; legacy technology and organisational culture.
One of the reasons organisations struggle to move change through at pace is the inherent dependency on legacy enterprise systems. Often large and unwieldy, development, testing and release processes can be complex and time consuming (not to mention expensive).
The convenience market is dynamic, verging on volatile. Every day new entrants drive competition harder. For the incumbents to be responsive and agile in the face of change, agility in the systems which underpin the retail operation are key.
A great blog, published by Erwin cites the evolution of Enterprise Architecture from existing on the periphery of IT, to being a central source of innovation. A balance has to be struck between designing for an (as yet) unknown future and delivering just enough, now.
In recent years this drive for agility has seen service oriented architecture (SOA), in which platform and application components communicate via service request and responses, evolve to ‘microservice architecture’. Whilst both approaches have potential drawbacks, the appeal of implementing a microservice approach is the modularity they offer – and the potential for flexibility. Where SOA can lead to monolithic applications (with inherent deployment constraints), each microservice is designed to be scalable, resilient, customer focussed and small – existing to serve a single business goal. Whilst it’s absolutely not to say SOA is a retiring architectural approach, microservice architecture has certainly entered the retail technology consciousness.
But is it simply about evolving architectural approaches? No. Organisational culture is key. Increasingly, organisations are adopting a ‘Start Up’ mentality, embracing Eric Ries concepts - even in multinational organisations. Indeed, recent examples include Nestle, who are driving innovation through ‘Digital Acceleration Teams’ (DAT). Under the programme employees are seconded to an entrepreneurial space at Nestle HQ. The participants engage in strategic organisational initiatives, running hackathons and similar intense problem solving activities. The objective? To promote flexibility and innovation without the shackles of major organisational hierarchy. It’s about freedom to make bold decisions, realising them quickly.
Equally, HSBC (about as far from a start up as possible) are working to operate as a fintech startup. Speaking at the recent RISE conference in Hong Kong, Darryl West, HSBC CIO discussed the introduction of multi functional co-located teams, working with agile enablement tooling for continuous integration and continuous delivery. Having implemented this across the company, West referred to the difference in speed to market and quality as being ‘massive’. I have no doubt that whilst the benefits of the approach are now being seen, the road to get there has been a challenging one.
There is no crystal ball, and no looking around the corner for what’s next (unfortunately). Clearly though, there is recognising the need for agility – and it’s absolutely not just about delivering code.
Wanting to talk to us about how we can improve your retail operation? Great, we can’t wait to hear from you.
Get in touch with our Head of Retail, Rich Ellis, by emailing him or phoning him on 0113 201 0621.